Definition: CPM, or Cost Per Mille, is a marketing metric used to denote the cost of 1,000 advertisement impressions on a web page. It is a standard measurement in advertising, allowing advertisers to compare the cost-effectiveness of different media and marketing channels.
Calculation: CPM is calculated by dividing the total cost of the ad campaign by the number of impressions (in thousands). The formula is CPM = (Total Advertising Cost / Total Impressions) x 1,000. This metric helps advertisers determine how much they are paying to reach 1,000 potential customers.
Usage: CPM is widely used in digital advertising, particularly for display ads, social media, and video campaigns. It is an essential metric for brand awareness campaigns where the goal is to reach a large audience rather than drive specific actions like clicks or conversions. Understanding CPM helps advertisers optimize their budgets and allocate resources efficiently.
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